can property management charge for maintenance?

If you own rental property in Pittsburg or anywhere in the East Bay, you’ve probably seen a management invoice with line items beyond the base monthly fee. These often include coordination fees, markups on vendor labor, or in-house maintenance billing. The question isn’t whether these charges exist; they are common across the industry. The question is whether they are legal, whether they are disclosed, and whether your agreement actually covers them. Here is what California law says and what you should look for before you sign anything.

The Short Answer: Yes, If It Is Disclosed

A property management company can charge for maintenance work, coordination, and vendor markups. None of that is inherently illegal. What makes a charge permissible or problematic is whether it appears clearly and specifically in your management agreement.

California law treats property managers as agents of the owner. Under Civil Code §§ 2295–2300, an agent owes the principal a fiduciary duty of loyalty and full disclosure. That duty applies directly to how property management maintenance fees are structured and communicated. If a manager is billing you a 12% markup on every plumber invoice and that markup isn’t written into your agreement, that is not just a billing dispute: it is a potential breach of fiduciary duty.

Licensed property managers and real estate brokers face an additional layer of accountability. Under Business and Professions Code § 10176, the California Department of Real Estate requires licensed agents to disclose all compensation received in connection with their services, including vendor referral fees and markups. Undisclosed compensation can trigger DRE disciplinary action, up to and including license suspension.

What Maintenance Charges Actually Look Like

Most management agreements authorize some combination of the following:
Base management fee- This is usually a percentage of collected rent. This covers routine oversight, but it does not necessarily include hands-on maintenance coordination.
Maintenance coordination fee- This is a flat fee or percentage charged when the manager schedules, oversees, or follows up on repair work. Industry practice, per IREM guidance, puts markup rates typically in the 10% to 15% range on vendor invoices. However, the range varies, and what matters is what your contract says.
In-house maintenance billing- Some companies employ their own maintenance staff and bill owners directly for that labor at disclosed hourly rates. This is legal when the rates are disclosed in the agreement. It becomes a problem when the agreement is silent on in-house labor costs.
Emergency repair authorization- Most agreements set a dollar threshold, often $300 to $500, below which the manager can approve repairs without owner sign-off. Charges above that threshold should require your approval unless it is a genuine emergency.

If your agreement does not address any of these categories explicitly, you should ask before you sign.

What the Agreement Should Say

A well-drafted management agreement in California should spell out:
1. The markup rate or coordination fee percentage applied to third-party vendor invoices.
2. In-house labor rates if the company operates its own maintenance division.
3. The repair authorization threshold, which is the dollar amount below which the manager can act without your approval.
4. How invoices are documented, as you should receive copies of vendor invoices alongside any markup charges.
5. Referral fee disclosure, specifically whether the manager receives any compensation from preferred vendors beyond what appears on your invoice.

If the agreement uses vague language like “reasonable fees” or “standard industry rates” without defining those terms, you should push for specifics. Vague language protects the manager, not you.

Security Deposits and Tenant-Facing Maintenance Charges

Maintenance charges do not only flow between owners and managers. They also come up at the end of a tenancy when the question is what can be deducted from a security deposit.

California Civil Code § 1950.5 permits deductions for cleaning and repair of damage beyond normal wear and tear. It also sets procedural requirements: an itemized statement must be provided within 21 days of move-out, and for deductions over $125, receipts or invoices must accompany the statement.

Normal wear and tear, such as faded paint, worn carpet from ordinary use, or minor scuffs, is not chargeable to the tenant. Damage caused by the tenant or their guests is. The line between the two is frequently disputed, so documentation matters. Managers who maintain detailed move-in and move-out inspection reports with photos are in a much stronger position when a deposit deduction is contested.

Separately, lease clauses that require tenants to handle minor repairs, replacing HVAC filters for example, are generally enforceable. What is not enforceable is any clause that attempts to shift the owner’s core habitability obligations to the tenant. Under Civil Code § 1941, the duty to maintain a rental unit in habitable condition belongs to the landlord and cannot be waived by lease language.

The Pittsburg and East Bay Context

In Oakland and Richmond, which are rent-controlled jurisdictions in the East Bay, maintenance-related cost pass-throughs to tenants as rent increases require approval through local rent board processes. Routine maintenance costs generally do not qualify for pass-through under Oakland’s rent adjustment program, as only capital improvements are eligible, subject to petition and board review.

Pittsburg is different. As of mid-2025, Pittsburg has no local rent stabilization ordinance. Maintenance cost questions between owners and managers, as well as between landlords and tenants, are resolved under state law and the lease agreement. That makes the quality of your management agreement and your lease more consequential here than in rent-controlled cities, where local ordinance provides an additional layer of structure.

For owners in Pittsburg and the broader Contra Costa market, where single-family rentals and small multifamily properties are common, informal or template management agreements are widespread. Many do not fully address property management maintenance fees. That gap can be costly over time, especially as operating costs rise and vendor pricing increases.

What to Do Before You Sign

Whether you are evaluating a new management company or reviewing an existing agreement, these are the questions that matter:

– Does the agreement list every maintenance-related fee by name and rate?
– Is there a markup on third-party vendor invoices? What is the percentage?
– Does the company have an in-house maintenance division? What are the labor rates?
– What is the repair authorization threshold?
– Will you receive copies of all vendor invoices?
-Does the company receive any compensation from preferred vendors that is not reflected on your invoice?

A manager who can answer all of those questions clearly and in writing is operating transparently. One who deflects or points you to boilerplate language is worth a second look.

Maintenance fees are a legitimate part of property management. The difference between a fair arrangement and a problematic one comes down to disclosure. California law is clear on the obligation, and your agreement should be equally clear on the details.

Croskey Real Estate, Inc. | DRE #02245890 `